Priority Agreement
Specified Collateral
MADE EFFECTIVE this
day of
,
(the “Effective Date”)
BETWEEN:
ALBERTA TREASURY BRANCHES
(“ATB”)
-andEnter the other creditor’s name as the Secured Party
(“Secured Party”)
-andEnter the borrower’s name as the Debtor
(“Debtor”)
RECITALS:
A.
The Debtor is or will become indebted to the Secured Party and as security for such indebtedness has granted
or will grant security interests to the secured Party in the Secured Party Collateral;
B.
The Debtor is or will become indebted to ATB and as security for such indebtedness has granted or will grant
security interests to ATB in the ATB Collateral;
C.
The Secured Party and ATB have each registered financing statements in respect of their security interests
in the Personal Property Registry for the Province of Alberta or intend to do so;
D.
The Secured Party and ATB wish to determine the priority of their respective security interests by this
agreement.
In consideration of the Recitals and of the agreements set out below, the parties agree that:
Definitions
1.
Unless otherwise defined in this agreement, all terms used in this agreement which are defined in the
Personal Property Security Act (“PPSA”) in effect in Alberta on the date of this agreement will have the
meanings given to those terms in the PPSA.
2.
In this agreement the following terms will have the following meanings:
(a)
“Account operator” means either ATB or the Secured Party who operates a banking account for the
Debtor, as determined by the context and circumstances applicable to the use of such term in this
agreement;
(b)
“ATB Collateral” means the Debtor’s personal property which is described or identified in the
attached Schedule “A”;
(c)
“ATB Security” means any security, security agreement or security interest now or in the future held
by ATB from the Debtor in respect of the ATB Collateral;
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Form 7316 (Rev. 11/11)
(d)
“Banking account” means a deposit account, chequing account, current account, savings account
or similar type of account maintained by the Debtor at any branch or office of ATB or the Secured
Party from time to time while this agreement is in force;
(e)
“Secured Party Collateral” means the Debtor’s personal property which is described or identified in
the attached Schedule “B”;
(f)
“Security” means collectively the ATB Security and the Secured Party Security;
(g)
“Secured Party Security” means any security, security agreement or security interest now or in the
future held by the Secured Party from the Debtor in respect of the Secured Party Collateral.
Consents
3.
ATB consents to the creation and issuance by the Debtor to the Secured Party of the Secured Party Security
and to the incurring by the Debtor of the indebtedness and obligations secured by it.
4.
The Secured Party consents to the creation and issuance by the Debtor to ATB of the ATB Security and to
the incurring by the Debtor of the indebtedness and obligations secured by it.
Priorities
5.
All perfected security interests granted by the Debtor to the Secured Party in the Secured Party Collateral
will have priority over any security interest that ATB now or hereafter has in the Secured Party Collateral.
6.
All perfected security interests granted by the Debtor to ATB in the ATB Collateral will have priority over any
security interest that the Secured Party now or hereafter has in the ATB Collateral.
7.
Subject to Section 8, each of the Secured Party and ATB, as the case may be, will be entitled, in priority to
any security interest of the other, to all proceeds and accounts of the Debtor arising out of the sale or lease
by the Debtor of such party’s Collateral and against which such party has a perfected security interest.
8.
Notwithstanding Section 7, where the Debtor operates a banking account with either the Secured Party or
ATB, neither the Secured Party nor ATB, as the case may be, will be entitled to claim any proceeds (whether
cash, instruments, accounts or in other form) that are deposited to any banking account of the Debtor held
at any branch of the other:
(a)
unless they are specifically directed by the Debtor to be credited to a trust account for the benefit
of the Secured Party or ATB, as the case may be, or
(b)
except those received by the account operator more than
operator has received notice pursuant to Section 9.
business days after the account
9.
It is intended and agreed that banking accounts of the Debtor held at either the Secured Party or ATB will be
operated in the ordinary course free of any proceeds claim by the other until the account operator receives
written notice from the other that the Debtor is in default and the other intends to enforce its security against
the Debtor, whereupon subsection 8(b) will apply.
10.
The priorities established in this agreement will apply in all circumstances regardless of :
(a)
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the respective dates of execution, attachment, registration or perfection of the Security or the
security interests created thereby;
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Form 7316 (Rev. 11/11)
(b)
the dates of advances of loans or extensions of credit made to the Debtor by ATB or the Secured
Party;
(c)
the date of default by the Debtor under any of the Security, the dates of crystallization of any
floating charges held by either ATB or the Secured Party, the date of the appointment of a receiver,
or the taking of any other steps to realize under any of the Security;
(d)
any priority granted by any principle of law or any statute, including without limitation the Banks
and the Banking Law Revision Act (Canada) or the PPSA.
11.
If any of the Security is found by a court of competent jurisdiction to be unenforceable or invalid, the
foregoing priority provisions will not apply to such Security to the extent that it is found to be unenforceable
or invalid.
12.
Any insurance proceeds received by any of the parties in respect of any collateral charged by the Security
will be dealt with according to the preceding provisions of this agreement as though such insurance proceeds
were paid or payable as proceeds of realization of the collateral for which they compensate.
13.
If either ATB or the Secured Party realize upon their security and in so doing receive money to which the
other is entitled pursuant to this agreement, then such money will be held in trust for the other and paid over
to the other on demand as long as and to the extent that the Debtor is then indebted to such party.
Notices
14.
Any notice required or permitted to be given pursuant to this agreement will be in writing addressed to the
parties as follows:
TO ATB:
Attention:
Fax No.:
Telephone No.:
TO the Secured Party:
Attention:
Fax No.:
Telephone No.:
TO the Debtor:
Attention:
Fax No.:
Telephone No.:
Notices may be sent by fax or may be delivered during the business hours of the intended recipient. Notices will
be deemed to have been received on the first business day following receipt on the fax machine of the recipient
or on the date of delivery. Any party may change its delivery address by written notice to the other parties sent
in the manner provided above.
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Form 7316 (Rev. 11/11)
General
15.
As long as any of the indebtedness of the Debtor remains outstanding, the Debtor will stand possessed of its
assets so charged for ATB and the Secured Party in accordance with their respective interests and priorities
as herein set out. The Debtor consents to ATB and the Secured Party advising each other of the particulars
of the indebtedness of the Debtor to each and exchanging any other financial information they deem
relevant. Neither ATB nor the Secured Party will have or incur any liability to the Debtor for providing such
information, nor for any direct or indirect consequences resulting from doing so.
16.
The parties will do all things necessary from time to time to give full effect to this agreement. No consent of
the Debtor will be necessary to any amendment of the terms of this agreement by ATB and the Secured
Party.
17.
This agreement may be terminated by either ATB or the Secured Party at any time on ten days written
notice. Such termination will not effect a termination of this agreement with respect to any existing loans
or advances made to the Debtor by either ATB or the Secured Party or the security interests of either of them
in any assets of the Debtor obtained prior to the effective date of such termination. Termination of this
Agreement by either ATB or the Secured Party may be treated by the other as a notice under Section 9, in
which case the provisions of Subsection 8(b) will apply to any money or instruments received prior to or after
the effective date of such termination.
18.
Upon termination of this agreement pursuant to Section 17 or upon receipt of notice pursuant to Section 9,
ATB or the Secured Party may, at their option and as applicable, do any one or more of the following:
(a)
treat such event as an event of default entitling it to immediately terminate any or all credit facilities
of the Debtor, including any revolving line of credit, and to refuse to make any further advances on
any such facilities;
(b)
demand immediate payment of all amounts owed by the Debtor;
(c)
refuse to pay cheques on or otherwise permit withdrawals from any of the Debtor’s banking
accounts;
(d)
deal with any credit balances in any of the Debtor’s banking accounts in such manner as it in its sole
discretion thinks fit;
(e)
take any such steps as it thinks fit in order to comply with the terms of this agreement.
19.
This agreement may be executed in counterpart. Each counterpart when executed will be deemed to be an
original and all counterparts together will constitute one agreement, to be effective as of the Effective Date.
20.
This agreement will be interpreted in accordance with the laws of the Province of Alberta and the courts of
Alberta will have jurisdiction over any dispute related to it.
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Form 7316 (Rev. 11/11)
Executed as of the Effective Date.
SIGNED in the presence of:
ALBERTA TREASURY BRANCHES
By its authorized representative
________________________________________
Witness:
__________________________________________
SECURED PARTY:
Per: ______________________________________
Per: ______________________________________
DEBTOR:
Per: ______________________________________
Per: ______________________________________
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Form 7316 (Rev. 11/11)
Schedule “A”
(Put an “X” beside the collateral that applies)
ATB Collateral:
a) All of the Debtor’s present and after acquired inventory, the acquisition of which is or has
been financed by ATB, consisting of new and used Describe inventory type such as vehicles,
appliances, etc. and all parts and supplies intended to be attached to or included with such
Describe inventory type as above at time of sale; and/or
b) All inventory of the Debtor wherever located; and/or
c) All accounts receivable of the Debtor including all accounts, instruments, claims, demands,
debts and other actions or causes of action of every nature however arising which are now
due, owing or accruing due, or which may hereafter become due, owing or accruing due to
the Debtor, together with all records (whether in writing or not) and other documents of any
kind which in any way evidence or relate to any or all of such accounts receivable; and/or
d) All present and after acquired personal property of the Debtor other than the Secured Party
Collateral which is described in Schedule “B” hereto; and/or
e) The following specific Enter “pieces of equipment” or “accounts”, etc.:
Include specific list and sufficient particulars to clearly identify each item
Schedule “B”
(Put an “X” beside the collateral that applies)
Secured Party Collateral:
a) All of the Debtor’s present and after acquired inventory, the acquisition of which is or has
been financed by Secured Party, consisting of new and used Describe inventory type such as
vehicles, appliances, etc. and all parts and supplies intended to be attached to or included
with such Describe inventory type as above at time of sale; and/or
b) All inventory of the Debtor wherever located; and/or
c) All accounts receivable of the Debtor including all accounts, instruments, claims, demands,
debts and other actions or causes of action of every nature however arising which are now
due, owing or accruing due, or which may hereafter become due, owing or accruing due to
the Debtor, together with all records (whether in writing or not) and other documents of any
kind which in any way evidence or relate to any or all of such accounts receivable; and/or
d) All present and after acquired personal property of the Debtor other than the ATB Collateral
which is described in Schedule “A” hereto; and/or
e) The following specific Enter “pieces of equipment” or “accounts”, etc.:
Include specific list and sufficient particulars to clearly identify each item
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Form 7316 (Rev. 11/11)